Motorola In Consortium To Take Bull By Horns

Move Aims To Revive Ailing French Computer-maker

April 14, 1995|By John Schmeltzer, Tribune Staff Writer.

Schaumburg-based Motorola Inc. Thursday joined an international consortium to take private the money-losing French computer-maker Groupe Bull.

The French government announced in Paris that Motorola would be joined by NEC Corp. of Japan, while the French government-controlled France Telecom would maintain its existing stake in Bull, which owns Buffalo Grove-based Zenith Data Systems Inc.

Smaller stakes in the new Bull are being taken by Japan's Dai Nippon Printing and IPC of Singapore, while IBM will maintain its existing 1.8 percent stake. In exchange, the French government will cut its stake in Bull to 40 percent, the first step in a move to fully privatize the firm.

Motorola officials said the investment would pay big dividends in its development of the PowerPC, the computer chip Motorola is developing to compete with Intel Corp. chips.

"This decision extends our existing research-and-development partnership, focuses our investment in Bull's privatization on development of new PowerPC products and is a triple win-for the new Bull, for PowerPC and for Motorola," said William E. Spencer, Motorola vice president.

"This is an investment of cash. It will provide dedicated resources for expansion of our partnership in the PowerPC development," according to a Motorola spokesman. He noted the company had announced last September an agreement with Bull to work cooperatively in integrating hardware.

"We see some strengths there that complement our own capability," he said.

NEC for its part has been a Bull ally since 1984 in large mainframe computers and communications technology.

But Motorola, the other firms buying stakes and the French weren't saying how much each was paying to get a piece of Bull, the last of the major European computer-makers. Last November, Olivetti, the Italian conglomerate, opted to begin building Apple Macintosh computers under license rather than its own machines.

By choosing the Motorola and NEC bids, the French for the time being managed to protect their telecommunications industry from the same kind of competition that led to the downfall of Bull.

AT&T Corp., along with its French partner Quadral, had been seeking a 40 percent stake in exchange for permission to compete against France Telecom.

Analysts said they were puzzled by Motorola's decision to take a 10 percent stake in the troubled European maker.

"Every couple of years Motorola does something that doesn't seem to make a lot of sense," said one analyst who asked not to be identified.

In trading on the New York Stock Exchange, Motorola closed up 37 cents, at $54.87.

But the investments by Motorola and IPC could prove to be a boon for Zenith Data, according to Jacques Noels, president and chief executive officer of Zenith.

Noels said IPC would be the marketing muscle Zenith Data needs to get its products more widely distributed in Southeast Asia, a market where nearly half of its sales already are located. And Noels said Motorola's wireless communication expertise could help in the development of a new line of products like Zenith's CruisePAD, a wireless computer screen and keyboard that allows people to use their computer terminals without sitting in front of them.

"We've made a strong turnaround in the market in the last two years. We came from an unprofitable to a profitable situation," said Noels. "This agreement is arriving at the right time. It clearly is good and has no negative consequences for our employees."

Under provisions of the agreement, NEC will raise its stake to 17 percent from 3.74 percent while Motorola will take an initial holding of 10 percent.

Smaller stakes of 3 percent to 4 percent will be sold to IPC and Dai Nippon Printing.

France Telecom will keep a 17 percent stake in Bull and, with Motorola and NEC, form a committee to help manage Bull.